The Securities and Exchange Commission (SEC) has charged Palm Beach County resident Charles Baugh with violations of the anti-fraud provisions of the federal securities laws in connection with his trading in the securities of ADT, Inc. ahead of an announcement that the company had agreed to enter into a partnership with Google LLC.
According to the SEC’s complaint, in July 2020, Baugh misappropriated material, nonpublic information about ADT’s agreement with Google from a family member who was employed by ADT. As alleged, based on this material, nonpublic information, Baugh then purchased ADT securities and also persuaded another relative to purchase ADT securities.
Once ADT’s agreement with Google was made public, Baugh and his relative sold their ADT securities resulting in approximately $397,000 in total profits.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida charges Baugh with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks injunctive relief, disgorgement with prejudgment interest, and a civil penalty.
Without admitting or denying the allegations, Baugh has agreed to consent to the entry of a final judgment, subject to court approval, permanently enjoining him from committing or engaging in specified actions or activities relevant to such violations; ordering him to pay disgorgement of $320,908, plus prejudgment interest thereon of $50,405; and imposing a civil money penalty of $473,660.
